Prosafe SE

Earnings Release • Nov 2, 2017

Prosafe SE: Third quarter 2017 results

Prosafe SE: Third quarter 2017 results

(Figures in brackets refer to the corresponding period of 2016)

Utilisation of 38.9 per cent and EBITDA of USD 27.6 million in the quarter.

Mr. Jesper Kragh Andresen, Prosafe CEO says, "In early August, Safe Boreas

commenced on a 13-month firm contract with Statoil at the Mariner installation

in the UK North Sea. In addition, Statoil can exercise six one-month options.

Total value of the firm contract is approximately USD 131.8 million, including a

re-phasing charge of USD 30 million that was paid to the company in 2016. For

Prosafe this is a very important contract and an equally important customer.

Hopefully the period at the Mariner installation will continue to showcase our

capabilities as operator of the highest quality flotels and creator of customer

satisfaction."

Highlights

* Good operating performance

* Impairment of goodwill, older vessels and Safe Scandinavia

* Delivering on cost and capex reductions. Focus on continuous improvement

remains

* No Lost Time Injury (LTI) in the quarter

Operations

The fleet utilisation rate of the vessels was 38.9 per cent (52 per cent).

The Safe Scandinavia TSV was fully contracted in the quarter to Statoil with a

firm contract period until the end of June 2018.

Safe Caledonia commenced a contract with Total in the UK in mid-May 2017 and was

fully contracted in the quarter. The contract ended late October 2017.

Safe Notos commenced a three-year and 222-day contract for Petrobras on 7

December 2016. From 1 July 2017, Safe Notos was off-hire to conduct preventive

maintenance and repair of the gangway. The vessel recommenced operations with

Petrobras in early August.

Safe Concordia completed the contract with Petrobras in late July. The vessel

then moved from Brazil to Curacao for lay-up.

Safe Boreas commenced the 13-month firm contract period for Statoil at the

Mariner installation in the UK in early August.

Safe Zephyrus, Regalia, Safe Bristolia and Safe Astoria were idle in the

quarter. Safe Zephyrus, Regalia and Safe Bristolia are laid up in Norway, while

Safe Astoria is laid up in Indonesia.

Safe Eurus is in a preserved, strategic stacking mode with COSCO (Qidong)

Offshore Co., Ltd. (COSCO) in China. Consistent with previous quarters, the

company has accrued for lay-up cost for Safe Eurus. According to the agreement

with COSCO, 50 per cent of the accrued lay-up cost shall be paid on delivery and

the remaining 50 per cent after delivery.

The standstill agreement between Prosafe and COSCO relating to Safe Nova and

Safe Vega has been extended until December 2017. Prosafe remains in negotiations

with COSCO and related parties to find a workable commercial solution for these

vessels. If an agreement is not reached, Prosafe has the right to cancel the

Safe Nova and Safe Vega newbuild contracts due to delay and claim a refund of

the instalments plus interest equal to approx. USD 60 million secured by Bank of

China.

Financials

Revenues for the third quarter of 2017 were USD 68.9 million (USD 129.8

million). This decline is due to the lower utilisation referred to above as well

as lower day rates.

Operating expenses declined to USD 41.3 million (USD 61.5 million) mainly due to

lower activity and cost reductions.

EBITDA was USD 27.6 million (USD 68.3 million).

Depreciation has increased to USD 34.8 million (USD 29.1 million) mainly due to

the new build Safe Notos.

Due to a continued weak market outlook an impairment charge has been made to the

third quarter accounts. The impairment amounts to USD 609 million, out of which

USD 226.7 million relates to goodwill which has been fully impaired. The

remaining USD 382.3 million relates to the vessels.

Operating loss equalled USD 616.2 million (operating profit of USD 39.2

million). Excluding the impairment charge, the operating loss is USD 7.2

million.

Net financial costs were USD 16.3 million (USD 168.2 million positive including

a gain on forgiveness of bond debt of USD 197.6 million).

Taxes declined to USD 2.5 million (USD 5.5 million).  Net loss amounted to USD

635 million (net profit of USD 201.9 million).

Total assets at 30 September amounted to USD 1,957.3 million (USD 2,711.2

million).

The reduction is due to the impairment of vessel values in the quarter. Net

interest-bearing debt equalled USD 1,139.8 million (USD 1,242.9 million), while

the book equity ratio declined to 23.3 per cent (39.7 per cent) mainly as a

consequence of the impairment charge made in the quarter.

Outlook

Despite positive signals like oil price development, reduced break even levels

across the industry and oil companies returning to cash positive positions,

activity pick-up is slower than expected. As a result Prosafe anticipates a

continued volatile market for the foreseeable future. In the meantime, the

company is continuing its focus on cost and spend efficiencies and business

improvements to protect its financial runway. In combination with efforts to

enhance its strategic position Prosafe aims to be well placed for an upturn.

Prosafe is a leading owner and operator of semi-submersible accommodation

vessels. The company is headquartered in Larnaca, Cyprus and listed on the Oslo

Stock Exchange with ticker code PRS. For more information, please refer to

www.prosafe.com

Larnaca, 1 November 2017

The Board of Directors of Prosafe SE

Attachments:

Q3 2017 report

Q3 2017 presentation

For further information, please contact:

Jesper K. Andresen, CEO

Prosafe Management AS

Phone: +47 907 65 155

Stig Harry Christiansen, Deputy CEO and CFO

Prosafe Management AS

Phone: +47 478 07 813

Cecilie Helland Ouff, Senior Manager Finance and Investor Relations

Prosafe AS

Phone: +47 991 09 467

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.